Where are You Getting Your Financial Advice?

Making financial decisions—on investments, superannuation, insurance, estate planning, debt, retirement—often involves long-term consequences. Poor advice can cost far more than fees: it can erode savings, expose you to risk you didn’t understand, or trap you in unsuitable financial products. Conversely, good advice aligned with your situation can help you grow wealth, minimise tax or fees, protect against downside, and improve confidence and wellbeing.

Here are some concrete impacts:

• Financial loss when advice is driven more by commission or product-sales rather than by what’s best for you.

• Wasted opportunity when advice doesn't factor in your full situation, so you miss better options.

• Regret and stress when promised outcomes don’t materialise, undermining trust in advice altogether.

So getting advice that is qualified, ethical, transparent, and tailored to your needs isn’t just nice — it’s essential to safeguarding your financial future.

Common Pitfalls in Seeking Financial Guidance

When people look for financial advice, there are a number of dangers or traps. Some of the most common:

1. Misinformation or superficial guidance
   • Advice via social media ("finfluencers") that’s not backed by qualifications or regulatory oversight. You might get catchy, simple tips, but they’re often not tailored or accurate. Recent data shows younger Australians are more likely to get financial ideas via social media than via qualified advisers. (ASFA)

   • Misleading claims or “too good to be true” promises (high returns, low risk) without disclosure of costs or risks.

2. Unqualified advice
   • Advice given by people who do not meet the legal/educational requirements. Sometimes people believe certain courses or designations are enough, but they may not satisfy regulatory standards.

   • Data from ASIC and the Financial Advice Association shows that as at mid‐2025, 4,600+ advisers had still not met the education standard required to legally give personal advice to retail clients. (Faaa)

3. Conflict of interest (or undisclosed incentives)
   • When advisers benefit from selling certain financial products, or receive commissions, there’s a risk advice will tilt towards those products rather than what’s best for the client.

   • Historically, some regulation (e.g. AFFS, commissions reforms, ban on conflicted remuneration) has tried to reduce this. But compliance and transparency remain uneven. The Quality of Advice Review identifies that consumers still don’t always know how advice providers are remunerated. (Treasury)

4. Trust issues
   • Many people distrust financial advisers. ASIC’s 2019 Report 627 found nearly half of consumers agreed that advisers were more interested in making money for themselves than helping clients, and over a third agreed that advisers don’t generally have clients’ best interests at heart. (ASIC Download)

   • Even when people intend to get advice, distrust or uncertainty about cost, scope, or regulatory protections prevents them. (ASIC)

5. Regulatory or documentation failures
   • Advice documents or disclosure forms (Statements of Advice, Financial Services Guides) that are poorly written, missing information, or not compliant with legal standards.

   • Research shows many advice documents are not audited, and when audited, many fall short of compliance, leading to consumer risk. For instance, a pilot study noted that only 5-15% of advice documents are audited annually, and among audited ones, ~75% are found to be non-compliant or with regulatory risk. (arXiv)

6. Scams and unlicensed advice
   • Offering “super fund transfers,” investment opportunities, or retirement advice via fraudsters, particularly over social media or via cold-calls.

   • ASIC has recently issued warnings to “finfluencers” who promote financial advice without proper licence or qualifications. (Courier Mail)

Recent Research on Trust and Adviser Credibility

To illustrate how seriously these issues affect people:

• In 2024, the Value of Advice Index (by MYMAVINS for Financial Advice Association Australia, FAAA) found that 94% of clients who have financial advisers trust them to act in their best interests. (Money Management)

• In the same report, 93% said their adviser helped them better manage financial risks. Also around 90% of advised clients said the benefits of advice outweigh the costs. (SMSF Adviser)

• However, Report 627 (ASIC, 2019) showed distrust remains high among people who have not used advice recently. About 49% believed advisers were more interested in enriching themselves than helping clients; 37% thought advisers did not generally have the clients’ best interests at heart. (ASIC Download)

• And the ASFA (Association of Superannuation Funds of Australia) study (2024) indicates younger Australians (18–34) are more likely to trust financial advice from social media than from qualified professionals in some cases — increasing exposure to misinformation or unqualified sources. (ASFA)

These findings show a paradox: people who have advice tend to trust it and see value; many who don’t have advice are wary perhaps because they can’t reliably distinguish good from bad. Also, qualification and regulatory status of advisers have become major factors influencing credibility.

How Misinformation, Unqualified Advice, and Trust Issues Affect Outcomes

Putting together the research and known pitfalls, here are ways these problems translate into worse outcomes:

• Poor alignment with personal circumstances: Advice that doesn’t consider your age, income, risk tolerance, family obligations, tax situation, or other investments can lead to bad choices — too much risk, too much conservatism, bad asset mix, etc.

• Higher costs and fees: Hidden fees, commissions, or renewing fees for services not rendered can eat into returns and reduce net savings. Over time, compounding of costs has a large drag on wealth.

• Higher risk exposure: If an adviser isn’t thorough, doesn’t disclose conflicts, or pushes higher-risk products for kickbacks, you may lose more than you anticipated.

• Lost trust and inertia: Negative experiences lead people to avoid seeking advice again. That means they miss out on opportunities: tax strategies, retirement planning, insurance to protect against shocks. This creates inequality in outcomes: those who can access good advisers early tend to do better.

• Legal or regulatory vulnerability: Advice that’s not compliant with law exposes both client and adviser to risk. If something goes wrong (e.g. financial loss due to advice), it may be harder to get compensation if adviser has not followed required standards.

What “Qualified & Reputable” Should Mean in Australia

To avoid pitfalls, it helps to understand what qualified and reputable financial advisers are expected to have or do, under current Australian regulation and industry best practice.

Some of the markers:

• Registered on ASIC’s Financial Advisers Register (FAR), which lists all “relevant providers” who give personal advice on relevant financial products (investments, super, life insurance). (ASIC)

• Hold an Australian Financial Services Licence (AFSL) themselves, or be an authorised representative under a valid AFSL. (Moneysmart)

• Meet or be working towards the educational / qualification standard under the Corporations Act / relevant professional standards (e.g. Degree or approved qualification, or via Experienced Provider Pathway). By 1 January 2026, all advisers must meet the standard. (Faaa)

• Disclose conflicts of interest, fees, commissions, product ownership, and how they are paid. Also provide full written advice, preferably Statements of Advice that show risks, costs, assumptions, alternatives. (Treasury)

• Belong to or adhere to professional bodies / codes of conduct / ethical standards.

• Keep up continuing professional development (CPD) to stay current with laws, markets, products.

Practical Tips: How to Identify Trustworthy Advisers, Avoid Scams, and Secure Your Long-Term Financial Health

Here are concrete steps you can take:

Step	What to Do	Why It Helps / What to Watch
Decide what you need first	Before contacting anybody, list your goals (retirement, paying off debt, saving for children’s education, etc.), your risk tolerance, budget (what you can pay), complexity of your situation.	Helps in evaluating whether the adviser offers services that match you (simple vs comprehensive advice, general vs personal advice).
Use official registers	Check the Financial Advisers Register (ASIC / MoneySmart) to verify adviser’s name, licence/authorisations, qualifications, disciplinary history. (Moneysmart)	Ensures the person is legally permitted to give advice, and see what kind of advice/products they are allowed to advise on.
Ask about qualifications and compliance	Ask if they meet the “approved degree or qualification” or are under the Experienced Provider Pathway. Confirm what that qualification is.	As noted, many advisers are still completing these standards; you want someone already meeting them. (Faaa)
Understand how they get paid	Ask for full disclosure of fees, commissions, and whether they receive money from product providers. Look at Financial Services Guide (FSG) and Statement of Advice (SOA).	Because incentives can distort advice. If you understand the cost structure, you can assess whether you’re getting value.
Check for conflicts of interest	Are they linked to product providers? Do they benefit from recommending certain products? Is the adviser independent?	Conflicts don’t always mean bad outcomes, but undisclosed or un-managed ones can lead to poor recommendations.
Compare advisers thoughtfully	Meet a few, compare costs, service, communication style, how customised their advice is. Don’t just take the first adviser you find.	Helps to see who listens, who explains clearly, who seems trustworthy.
Read and evaluate documentation	A good adviser gives you a Statement of Advice in writing, that includes assumptions, risks, alternatives, what is not included. Read it. Ask questions.	Reduces surprises later; gives you something to refer to and hold them accountable.
Look for ongoing support or review	Advice isn’t set-and-forget; situations change. Ask if they offer reviews, updates, how often they communicate.	Helps ensure your plan stays appropriate as life or markets change.
Check disciplinary or complaint history	Via ASIC registers, or through professional bodies. See if the adviser has been disciplined or had complaints.	A clean record doesn’t guarantee perfect advice, but history can signal problems.
Beware of “too good to be true” offers	High returns, guarantees, strong selling pressure, or promises of “secret” products. Offers via social media, unsolicited contact.	These are classic features of scams or poor advice.
Don’t ignore cost or fee structure	Cheaper isn’t always better, but expensive doesn’t guarantee better. Understand fixed vs percentage vs commission vs ongoing fees. Know total cost over time.	Because fees compound and reduce returns, especially over many years.

Recent Regulatory & Industry Developments

Some key changes to be aware of:

• Quality of Advice Review (December 2022): This review (by the Australian Treasury) proposes reforms aimed at improving the accessibility, affordability, and quality of financial advice. It emphasises better regulation of personal advice, stronger “good advice” duties, and clearer disclosure rules. (Treasury)

• Education / Qualification Standard: From law and regulatory changes, advisers will need to meet approved qualification standards (or via Experienced Provider Pathway) by 1 January 2026. (Faaa)

• ASIC compliance pressure on registers: ASIC has flagged that various entries in the Financial Advisers Register have inaccuracies (about qualifications, approved credentials), and is pushing licensees to correct records. (Bellrock)

Putting It All Together: Ensuring Your Financial Decisions Support Long-Term Security

Long-term financial security doesn’t come from one good decision, but from a pattern of reliable, well-informed decisions over years. To enhance your chance at good outcomes:

• Be sceptical but open: trustworthy advisers will expect you to ask questions, not feel offended.

• Take time: don’t rush into investment or insurance products just because someone offers them.

• Make decisions based on evidence: ask for data, references, historical performance, scenario analyses.

• Diversify sources of information: use more than one adviser if the decision is big; get second opinions.

• Build your financial literacy: the more you understand, the better able you’ll be to judge advice.

• Review regularly: life changes, markets change, laws/taxes change. What made sense 5-10 years ago may not now.

Conclusion

Choosing financial advice is a critical decision. The wrong advice can cost more than money—it can cost peace of mind, future opportunity, even your ability to retire securely. The good news is that there are clear standards and tools in Australia — registers, educational requirements, and regulatory protections — that when used properly can help you identify trustworthy advisers.

Don’t settle for anything less than someone who is qualified, transparent about fees and conflicts, and whose goals align with yours. Do the homework. Ask the right questions. And treat financial advice as a long-term partnership, not a once-off transaction. Your future self will thank you.

References

1. Quality of Advice Review Final Report, Australian Treasury (2022). (Treasury)
2. ASIC Report 627: Financial advice: What consumers really think (2019). (ASIC Download)
3. Value of Advice Consumer Research / Value of Advice Index, FAAA / MYMAVINS (2024). (Money Management)
4. ASFA research: Younger Australians under 35 more likely to listen to finfluencers than qualified advisers (2024). (ASFA)
5. “Assessing Regulatory Risk in Personal Financial Advice Documents: a Pilot Study” (2019). (arXiv)
6. ASIC update: 4,604 advisers yet to meet the education standard (2025). (Faaa)
7. ASIC urges AFS licensees to correct records on the Financial Advisers Register (2024). (Bellrock)